When COVID-19 arrived in March 2020, it brought a wave of uncertainty. What followed in real estate was one of the tightest, most competitive housing markets the U.S. and Canada have ever seen.

Between August 2020 and August 2021, home prices in both countries hit all-time highs. Prices in the U.S. climbed a record 19.9%, while Canadian prices jumped a record 21.4%. That was great news for sellers, but it made the past year and a half a real challenge for buyers. So what comes next? Will prices keep rising in 2022, flatten out, or start to fall?

Bull or Bear: Which Way Is the 2022 Market Headed?

The experts don't all agree. Some expect prices to keep climbing, while others see a downturn coming. What's clear is that prices have been rising faster than they did in the lead-up to the 2008 financial crisis, and growth at this pace simply can't continue forever. The real question is how the slowdown happens: a sudden drop in 2022, or a gradual easing over time?

Rising, Falling, or Holding Steady?

Most forecasters believe the market in both the U.S. and Canada will cool, but only a little. Here's what several major sources are projecting:

  • Fannie Mae: Median home prices are expected to grow about 7.9% from the fourth quarter of 2021 to the fourth quarter of 2022. That's slower than today's pace but still healthy by historical standards, signaling a return to steady appreciation.
  • Zillow: Projects home prices will rise 13.6%.
  • Goldman Sachs: The most optimistic of the group, forecasting a 16% increase.
  • CoreLogic: Takes a more cautious view, calling for just 2.2% price growth.

Even with a modest cooldown, conditions still lean in sellers' favor. Inventory is hovering near record lows, and the gap between the number of available homes and the number of buyers keeps getting wider. That doesn't mean buyers are out of luck. With the right agent in your corner, you can still find a home in 2022.

What Does This Mean for Your Home?

Curious how the past two years have affected your property's value? Reach out and I'll prepare a free home valuation for you.